SOUTHWEST HOUSING COMPLIANCE CORPORATION
DISASTER FAQ’s
11-07-08
Background
On September 13, 2008, Hurricane Ike hit the Gulf Coast Region of Texas, causing destruction of
property and resident displacement for many low-income tenants, both on the coast and
inland. Since the storm, owners and agents have asked SHCC several questions specific to their
Project-Based Section 8 communities. Many of the critical questions posed are related to
the effect of the displacement of assisted families on the Housing Assistance Payments (HAP) and the lease in-place at the time of the disaster.
Recovery from a natural disaster calls for the flexibility and cooperative efforts of all parties involved. HUD has encouraged property owners and agents to do their best to accommodate families that are displaced and work cooperatively with the local HUD staff in their information gathering and recovery efforts. In light of this, please note that owners of Section 221(d) 3, 221(d) 4, & 236 properties are required to give preference to Presidentially-Declared Disaster (PDD) displaced residents via placement at the top of the Wait List for both temporary and permanent housing. Other Section 8 properties (with the exception of 202s) may give preference and move PDD displaced residents to the top of the Wait List for temporary or permanent housing. In either instance, the owner’s Tenant Selection Plan must define each preference the owner has established that will affect the order in which applicants are selected from the wait list.
SHCC, the Houston HUD Program Center, and the Ft. Worth Hub Office have worked together to provide information for some of the questions raised based on previously released HUD guidance, as referenced herein.
Disclaimer: The information provided here is specific to Texas and Texas properties.
Question 1: Can an owner request subsidy payment on a unit that is unoccupied (as a result
of displacement) or deemed uninhabitable?
Answer: No.
Part V – Owner’s Certification of the Housing Owners’ Certification & Application for Housing
Assistance Payments, HUD-52670, item (3) Owners Certify that, “the units for which assistance
is billed are decent, safe, sanitary and occupied…” As a result, all units for which subsidy is
being requested must be habitable under Uniform Physical Condition Standards.
HUD notified SHCC on September 23, 2008 that:
Payments must be immediately suspended in TRACS for all properties that staff has
verified that the property is not occupied or is uninhabitable. Any properties that meet
the above description and have vouchered and received payment for October must have
the October funds recaptured in a future voucher…. Please note that partially occupied
properties should have their vouchers paid, but owners should not be vouchering for, and
the contract administrator should not be paying subsidy for, unoccupied or uninhabitable
units.
If a site visit or owner/agent contact verifies that a formerly vacant or uninhabitable
property has been repaired to decent, safe, and sanitary status, and residents have
returned to the property, TRACS may be adjusted to allow for a future payment status.
Note: HUD notified SHCC on October 30, 2008, that owners with Project-Based Section 8 HAP contracts may temporarily lease units in other multifamily properties on behalf of tenants whose units are rendered uninhabitable as a result of a Presidentially-declared disaster. This is a voluntary option and is not required. Please contact Jenny DeSilva, Director of Housing Assistance Payments, SHCC, at (512) 474-5332 ext. 3167 for more information on this option.
Question 2: Does the owner need to maintain contact with displaced tenants while
repairs are in progress?
Answer: Yes.
Owners must stay in contact with displaced tenants and keep them informed as to the date they
can return to their units if they desire to do so. Owners must inform tenants in writing at least 90 days in advance when their unit is habitable and can be re-occupied. Tenants must be allotted a 45-day response period to respond to the owner. Lastly, those tenants indicating an intention to return must be given a minimum of 60 days to reoccupy the unit, from the date the unit is repaired. Note, however, if a displaced tenant moves from a shelter or temporary housing to other permanent housing, the owner is free to rent the unit. See HUD memorandum dated July 20, 2007, Additional Disaster Guidance for Properties Impacted by Presidentially Declared Disasters (PDD) Katrina and Rita.
Question 3: Does the Section 8 tenant’s HUD lease remain in effect while the tenant
is temporarily displaced and awaiting completion of repairs?
Answer: Yes.
The HUD Model Lease for Subsidized Programs (hereafter referred to as the Lease) does not include disaster displacement as a circumstance for which the Landlord can terminate the lease.
Further, HUD has stated that disaster-displaced tenants have the right to return to the unit they were displaced from by the disaster; however, the right is not in perpetuity. Under the following three scenarios, the Landlord can terminate the lease:
1. Once a disaster-displaced tenant signs a permanent lease, at an alternative location, they are no longer displaced, and therefore, no longer eligible for return. Once a disaster-displaced tenant has chosen permanent housing, they are expected to immediately inform their former landlord and given notice of termination as specified in their lease.
2. Should the displaced tenant fail to respond to the owner’s 90-day notice regarding the availability of the repaired unit, the owner may rent the repaired unit to an eligible Section 8 applicant. Before doing so, however, the owner must inform the former tenant in writing that their assistance and lease is terminated.
3. If a displaced tenant fails to return after notifying the owner of their intention to return during the opportunity to return period, the owner may take action to terminate the lease in accordance with local law and rent the unit.
See HUD memorandum dated July 20, 2007, Additional Disaster Guidance for Properties
Impacted by Presidentially Declared Disasters (PDD) Katrina and Rita.
Question 4: How should these units be coded in TRACS?
Answer:
The owner must transmit a Termination Record (MAT 65) if the lease remains in effect. That being said, please note the following distinctions:
· If a tenant later informs the owner that they do not intend to return to the property following repairs or have found permanent housing elsewhere, a Move-Out Record (MAT 40) must be transmitted. This transmission is acceptable even if the owner has previously transmitted a Termination Record.
· SHCC and HUD both recognize that there is not an appropriate Termination Code in place in TRACS 2.0.2B or 2.0.2C to account for the temporary suspension of subsidy as a result of disaster displacement. That is why is it is critical, regardless of the code selected, that the tenant file be appropriately documented to denote that this termination of subsidy is a result of temporary suspension of HAP payments due to disaster displacement, not tenant noncompliance.
If at any point, the tenant:
· Notifies the owner that they do not intend to return to the property, or
· Notifies the owner that they have signed a permanent lease at an alternative location, or
· Fails to respond to the owner’s 90-day notice regarding the availability of the repaired unit, or
· Fails to return after notifying the owner of their intention to return during the opportunity to return period
And the owner takes the appropriate action to terminate the lease, the owner must transmit a Move-Out record (MAT 40).
Question 5: Can the owner of a Section 8 property transfer a displaced tenant to
another unit at the property versus having the tenant relocate off the premises?
Answer: Yes.
Owners with tenants under a Project-Based Section 8 Contract whose unit was rendered
uninhabitable can temporarily lease a unit to the tenant at the property which is habitable. The owner will sign a temporary lease on behalf of the displaced Section 8 tenant and begin to voucher for the contract rent for the temporary unit. The tenant is still responsible for the tenant’s share of the rent for the temporary unit. See HUD Notice 04-22 Disaster Recovery Guidance by Multifamily Housing After a Presidentially-Declared Disaster.
The appropriate TRACS coding for a tenant transfer from one Section 8 assisted unit to another
Section 8 assisted unit on the same HAP contract is a Unit Transfer (MAT 70). For those properties that have more than one Section 8 HAP contract for the property, the following may apply: If the transfer involves moving the resident to a unit on a different HAP contract, the following coding should be used:
· Termination (MAT 65) on the original Section 8 HAP contract and
· Initial Certification (MAT 10) on the new Section 8 HAP contract.
Note: If unit transfers to other Project-Based Section 8 units within the property would cause the
property to exceed their allotted unit mix for a particular unit type, the owner must provide SHCC written HUD approval to exceed the unit mix established by the contract and the last executed Rent Schedule on a temporary basis.
Question 6: Can the landlord charge the tenant for the tenant portion of the rent on a subsidized unit while it has been deemed uninhabitable and the tenant is displaced?
Answer: No.
Per Paragraph 24 of the HUD Model Lease for Subsidized Programs:
If the unit is damaged by fire, wind, or rain to the extent that the unit cannot be lived in and the damage is not caused or made worse by the Tenant, the Tenant will be responsible for rent only up to the date of the destruction. Additional rent will not accrue until the unit has been repaired to a livable condition.
References:
HUD Notice 04-22, Disaster Recovery Guidance by Multifamily Housing After a Presidentially-Declared Disaster.
HUD October 28, 2005 memorandum, Multifamily Disaster Clarification of Notice H 04-22 and Additional Guidance.
HUD July 20, 2007 memorandum, Additional Disaster Guidance for Properties Impacted by Presidentially Declared Disasters (PDD) Katrina and Rita.
Note: The above referenced HUD guidance is available for download on SHCC’s website, www.shccnet.org, under Links and Resources-Disaster Guidance.
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